March 06, 2020 04:53 ET | Source: Research and Markets Research and Markets

Dublin, March 06, 2020 (GLOBE NEWSWIRE) -- The "Earphones and Headphones Market - Global Outlook and Forecast 2020-2025" report has been added to ResearchAndMarkets.com's offering. The Global Earphones & Headphones Market is expected to grow at a CAGR of >13% during 2019-2025.

The global earphones and headphones market has witnessed a paradigm shift since the launch of a true wireless headphone by Apple in 2016. With this launch, smart wireless earphones have changed into hearables. Wearables connected to the user's smartphones and applications have steered the market toward smart accessories that could double the performance. Major vendors have focused to make headphones comfortable and convenient, with the ability to eliminate external noises and deliver an immersive listening experience. Several vendors have launched new models in the sports headphones market, which are sweat-proof and water-resistant with the ear padding removable and washable in few models. Vendors are implementing several IPX certifications to ensure that their earbuds are sweat and water-resistant. Bragi was one of the first vendors to launch IPX7-certified earbuds, which can withstand water-logging for up to 30 minutes. Currently, several variants, especially sports headphones, available in the market resist some splashes while the user is engaged in outdoor activities. Therefore, an increase in specialized features and additional capabilities are likely to influence the growth in the near future.

Earphones & Headphones Market: Segmentation This research report includes a detailed segmentation by type, technology, features, price range, end-users, noise accentuation, distribution channel, and geography.

Advances in audio technology, along with capabilities to cancel unwanted noise, eliminate sound leakage, and control ambient sound is increasing the share of on-ear headphones. These devices have large earpads and cover the user's ear, locking in the sound and increasing air displacement, thereby resulting in better audio and perceived soundstage. The prevalence of active noise cancellation capabilities is currently lower in on-ear models as they allow for sound leakage and passage of external sound due to their design. A major reason for the high market penetration of the in-ear headphones segment is the low price point of standard wired in-ear devices. However, features such as lightweight design and high portability are the major driving the adoption of in-ear devices. These devices have become a preferred choice among professionals and fitness & sports enthusiasts.

Over-ear wireless headphones offer a built-in capability to reduce external noise and provide added comfort to the user. The availability of features such as hi-fidelity sound and active noise cancellation is creating a buzz among consumers for over-ear devices in the global earphones and headphones market. Moreover, the major advantage, which is influencing the demand for over-ear models, is the inclusion of high bass response. In 2019, Europe was the leading market for over-ear devices, followed by North America. The high share of Europe can be attributed to the high adoption of gaming headphones, which are generally over-ear models. The true wireless segment is expected to grow at a CAGR of over 20% during the forecast period. The removal of the headphone jack has increased the adoption of true wireless earbuds. Technologically advanced true wireless devices are focusing on offering several real-time solutions rather than streaming music and answering calls. The availability of high-quality sound transparency, ambient noise control, speech elevation, and augmented hearing functionality is contributing to the growth of the segment. Although wired headphones have enjoyed the largest share in the global headphones market for a long period, the segment has witnessed a decline since 2010 due to the growing adoption of wireless ones and increased improvement in manufacturing and audio technology. Moreover, the relatively low aesthetic appeal of wired models has been the main reason for declining revenue in recent years. Another factor leading to the declining share of the wired segment is low endurance limits under heavy use. Wired devices tend to be more fragile than wireless ones. The segment is extremely popular in APAC emerging countries, where wired models are not priced at a premium. Wired models are more affordable for the middle-income population that accounts for a major share of the region's population. The demand for smart headphones has grown in recent years as an increasing number of consumers focusing on product aesthetics. Major application sectors such as entertainment and sports have witnessed a high adoption since 2016. Besides, the increasing adoption of handheld devices is a major factor influencing growth. They are mostly used by audiophiles, athletes, music composers, and health-conscious individuals as they allow users to monitor body vitals. Moreover, innovations in audio technology and sound engineering are placing headphones at the center of the connected universe. With their ability to link with a majority of connected devices, smart earphones are gaining increased attention from developers to be positioned as the central node of wearables and connected devices. However, the increasing availability of counterfeit and low-quality products severely hinders the sale of smart earphones. Non-smart headphones are likely to witness a slow growth in revenues and units sold. Although an increasing number of users worldwide is adopting smart earphones, non-smart models still have a significant consumer share among non-affluent consumers in regions such as south Asia and central Africa. The segment is expected to exhibit a decline in the growth rate, though the revenue will be positive because of the availability and increasing adoption of technologically advanced wireless devices. A major factor hindering the growth is the competition from unorganized sectors. The addressable market for these headphones is fast moving toward the lower-income consumer base, as the affluent population prefers smart headphones. The penetration of unorganized sector products is high in the low-income population. Therefore, non-smart headphone vendors face intense competition, which reduces profit margins. The ANC segment has witnessed tremendous growth over the past few years, mainly due to the rise in high-speed internet and connected devices. The growing demand for ANC in several audio settings, including hearing protection products and protective communication devices, is driving the transition of ANC headphones into the hearables segment that includes headphones, hearing augmentation solutions, and commercial headsets.

In terms of revenues, noise isolations earphones account for a share of over 52% of the global market revenue. The high share of noise-isolating devices is due to their relatively lower price range than active noise-canceling headphones, as well as the absence of need supply additional charge to the active noise-canceling circuitry. APAC is the third-largest market for noise isolating devices in terms of revenue and unit shipments in 2019. However, the region is expected to witness the highest CAGR for both revenue and unit shipments during the forecast period. The high growth opportunities from the region can be attributed to several factors with the major being a significant cost trade-off between noise isolating and noise canceling devices. Bose, Sennheiser, Apple, Sony, and Samsung are the premium vendors. Vendors are integrating wireless models with hi-tech functionalities such as layered hearing and speech amplification. Currently, smart wireless and smart truly wireless earbuds, which are feature-rich, fall under this segment. In the moderate-range wireless segment, truly wireless earbuds have the potential to lead in terms of sales.

Moderate range headphones are commonly available on e-commerce websites, physical stores, and supermarkets. They have better voice quality and playback time as well as latency than low-range models. The absence of innovative technological features can be attributed to moderate pricing, which is an important driver for high adoption. In terms of revenues, North America is the largest market for premium range earbuds, whereas Europe is the largest market for moderate and low range models. Europe leads the market in low range models due to the high number of customers that are willing to purchase earphones in the lower range. The growing music industry and the increasing popularity of rapping have a positive effect on the adoption of headphones, particularly those endorsed by singers and celebrities. The manufacturers are collaborating with several music artists to launch specifically designed headphone editions, which are likely to drive the pro headphones market. These editions are priced in the premium range; however, manufacturers continue to launch them, indicating that there is a vast untapped market for costly devices.

The growing adoption of smartphones has been pivotal in increasing the penetration of earphones. Advances in devices that can stream audio and video encourage users to invest in high-quality and sophisticated pro headphones. The growing fitness & club market and the increasing number of actively engaged gym and fitness enthusiasts are expected to drive the growth of the global sports headphones market. Among sports earphones, in-ear wireless and truly wireless earbuds are becoming popular among gym goers because of their ability to deliver music and digital streams while being convenient, small, and wireless. Thus, the growing membership in fitness clubs will undoubtedly drive the demand for wireless devices globally over the next few years. Retail and online are two major distribution channels for headphones. A majority of the revenue comes from retail distribution channels such as electronics stores, pro AV dealers, and distributors. However, their availability through online OEMs' e-commerce portals and online direct-to-consumer stores is growing. Vendors harness retail stores due to personalized customer services. The staff in these stores is educated about the usage of headphones. However, the growth in online sales is set to increase during the forecast period as these stores offer more options to choose from than retail stores. Several consumers seek to purchase professional headphones via online stores because of the ease-of-accessibility and convenience afforded by such channels.

Insights by Geography European consumers are showing a high inclination toward paid digital audio subscriptions. They are also actively engaged in fitness and sports activities. These trends are expected to create opportunities for the increased sale of headphones.

APAC is fast emerging as a powerhouse in the global market with unprecedented growth for headphones. The region constitutes several emerging economies where the users are starting to differentiate among headphones variants. In Latin America, people are more inclined toward online streaming, and the region is expected to become a leader in online streaming during the forecast period. Thus, streaming is gaining popularity because of the increased number of mobile devices and improved internet penetration. Therefore, all these factors are likely to contribute to the demand for headphones as they offer several functionalities. The US is a leading market in North America. Millennials majorly drive the market, and they can be termed as digital generation. They are tech-savvy, and most of them are addicted to their smartphones. The number of millennials is the largest working force not only in the US but also in Canada. In Canada, 37% of the total workforce comprised millennials. Even the growing number of internet users and the increasing number of music-based mobile applications are driving the market in the region.

Key Vendor Analysis The global earphones and headphones market is currently highly competitive for vendors. The market remains a little concentrated at the top, with the leading vendors enjoying the majority of revenue shares. Variations in customer demand across the globe and a consistent need for technological enhancement in product offerings are driving vendors to refine and modify their unique value propositions.

Bose, Apple, Samsung, Sony, Sennheiser, and Skullcandy are the major vendors in the market. The competition among these key players has intensified in recent years; moreover, the influx of new vendors and tech startups venturing in the audio sector is further putting pressure on the overall competitiveness of the market. Innovation, costs, and convenience play a crucial role in demand growth for such products.

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